From Craft to Industry without Losing Identity?

Two Cases from Hiroshima Prefecture

Abstract prepared for the

International Workshop on Craft and Emerging Forms of Organizing
Kyoto University, 12-13 April 2024

By Kazuo Doi, Tsutomu Kita, Tomomi Shiosaki, Takeshi Ohtowa, and Matthias Kipping*
* Corresponding author (mkipping@schulich.yorku.ca)

Context: Craft is Back(ward)?

Over the past years, there has been a renewed interest in craft in its multiple
manifestations and locations. Scholars have sought to better understand the place of craft
work in contemporary societies, the ways its production and consumptions are organized
as well as the relationships between individuals, the crafting processes, and the resulting
material objects (e.g., Bell et al., 2019). This includes a recognition of the knowledge and
skills involved in these processes and their transmission, leading to further interest in the
relationship between crafts and creative industries (e.g., Austin et al, 2017; Cacciatore &
Panozzo, 2022). At a broader level, there has been an incipient and ongoing discussion
about the extent to which craft is not only a challenge to dominant modes or globalized
production and organizing but might also oZer alternative models for more localized and
more sustainable production and consumption, for instance in the food and beverage
industries. Relatedly, some have also pointed to its possible role as locus for social and
political engagement at the community level, namely but not only in transition economies
(e.g., Gasparin & Neyland, 2022).

While clearly forward and future oriented, some of these practices and the related
scholarship have also quite a nostalgic feel to it, among others in its appeal to sustainable
tourism (see, for the case of sushi, Holt & Yamauchi, 2019). And how the ambitions to
innovate craft practices and develop new business models expressed by its proponents are
meant to happen and change current dynamics remains somewhat vague, at least at the
current stage of the ongoing research (see, e.g. the aims of EU-funded Hephaestus project;
https://hephaestuscraft.eu/). For instance, whether and how you can actually “incorporate
traditional craft techniques with cutting-edge technologies” does not appear obvious. The
(sad) reality is that over the past decades, many traditional industries and the associated
clusters, now usually called “ecosystems” (Gasparin & Quinn, 2022), have declined with
many craft producers disappearing. And yes, at the same time the production of craft beer
– and the related academic research, increased significantly (for a systematic overview,
see, Durán-Sánchez et al., 2022), though many of these brewers were acquired by the
dominant global corporations, which also launched their own craft beers/brands and brew
pubs – and all of them largely relied on the same production technology.
Focus and Objective(s)

This paper examines two such shrinking ecosystems, both located in Hiroshima prefecture
in Japan, and two companies, one in each cluster, which bucked the trend and ended up as
globally successful, though largely hidden producers. The paper looks at the conditions
and actions that enabled their survival and success and, most importantly asks whether
this success came at the detriment of their “craft” they did succeed, while preserving craft
skills, traditions, and identities, and if so, how they managed to “industrialize” their craft
without abandoning its essence (or whatever you want to call it), and what, if anything,
other craft organizations (and the associated clusters) might learn from these cases.

The two clusters are bingo kasuri near Fukuyama and Kumano fude (calligraphy brushes),
located in the eponymous town. Kasuri is a form of weaving and dying that probably
originated in Indonesia and then made its way northwards reaching Okinawa in the 12th/13th
century and the Japanese main islands in the 17th, where, by the middle of the 19th century,
the technique/practice/craft had established three main centers on three of them: Kurume
on Kyushu, Iyo on Shikoku and from there to Bingo (the Eastern side of today’s Hiroshima
Prefecture) on Honshu. At that time, most of the woven fabric was cotton and the dye was
indigo. As for the brushes, they seem to have initially been brought back from more
developed parts of Japan and sold by farmers working as migrant labourers during the
winter months to earn extra income. The local rulers apparently saw both a need (for record
keeping) and an opportunity and sent young people to the established centers to learn the
craft and then share it locally, eventually turning Kumano into a center of brush-making by
the mid-19th century. Production benefitted greatly from the creation of a compulsory
school system following the Meiji Restauration of 1868. By 1939, Kumano accounted for
90% of domestically produced brushes.

But, for diZerent reasons, both clusters started declining since the 1960s and even their
designation as traditional crafts by national legislation in 1974 did little to halt the decline,
let alone reverse it. Nevertheless, two companies Kaihara, located close to Fukuyama, and
Hakuhodo, from Kumano, are today among the largest global makers and suppliers of,
respectively, denim fabric and cosmetic brushes, though they are still SMEs. Thus, in 2022,
Kaihara had revenues of 10.6 billion yen (down from 16.3 billion yen in 2018), employed
close to 700 people and supplied denim for jeans sold by, among others, Gap, Levi’s, Polo,
and Uniqlo. That same year, Hakuhodo (not to be confounded with the advertising agency)
produced approximately 70 % of all the high-end cosmetic brushes sold worldwide,
achieving revenues of 1.7 billion yen (down from 2.5 billion yen in 2014) and employing
about 300 people. Both companies also received numerous awards: Thus, in 2007 Kaihara
was a recipient of the prestigious Porter Prize
(https://www.porterprize.org/english/pastwinner/2007/12/03152300.html), while
Hakuhodo was selected as one of the "Top 100 Global Niche Companies" by the Japanese
Ministry of Economy, Trade and Industry (METI) in 2020.
The paper analyzes the processes leading to this unexpected outcome in detail. It focuses
on identifying the various factors enabling their growth from modest origins as highly
specialized craft producers to SMEs, dominating their particular product niches at a global
level. The main aims is understand (i) what role, if any, craft techniques, skills, and
organization might have played in their transformation, (ii) whether and how they were
preserved and continue to influence these companies today – also in the perception of the
consumer (Yong, 2023); and (iii), if craft in some form or other is still present in these
organizations, how they manage the inevitable tensions between craft and industry logics
(Holt & Popp, 2016).

Data and Methodology

The paper is based on extensive research on these two companies and their context for
close to two decades. Authors conducted regular interviews with their founders and
successive leaders, other executives and functional managers in both organizations from
2007 until the present. Interviews were, on the one hand, retrospective and reflective
(providing an “oral history” perspective) and, on the other hand, helped observing decision-
making processes in real time (close to an ethnographic approach). They also obtained an
almost complete set of publications on both companies from a variety of both physical and
online repositories. And they visited numerous relevant municipal, regional and national
governmental and non-governmental agencies to collect information about the context in
which the clusters evolved and both companies operated.

This data was then examined following the broad direction suggested by Stinchcombe
(2005, 5) for historical research: “to study sequences of conditions, actions, and eZects
that have happened in natural settings, in suZicient detail to get signs of sequences that
are causally connected”. Particular documents, including interview transcripts/notes, were
and are currently being subjected to a critical text analysis following the methodologies of
historical research with specific findings and broader generalizations obtained through a
hermeneutic approach that revises preliminary conclusions based on additional
information until findings stabilize (see, for details, among others, Kipping et al., 2014; and
contributions in Decker et al., 2023).

Preliminary Findings

First, we established a sequence of key events (“eZects”), the conditions under which they
occurred and the key internal as well as external actors involved. We then compared the
two companies to try and identify similar patterns, or at least similar challenges (which the
companies might have addressed in diZerent ways), with a particular focus on the role of
“craft” in the development of both organizations. Following is a brief snapshot of the
similarities (and some of the diZerences) we tentatively identified:
In both cases, the companies started out from traditional craft production, though
already with an ambition to go beyond. Thus, Kaihara traces its origins back to a business
founded in 1893. making handwoven indigo-dyed bingo kasuri cotton fabric for kimonos,
though the founder’s father had originally only produced indigo dyes from plants. During
WWII, due to rationing of key materials, the company survived by making Bangkok hats and
kazura rope for the military. Production resumed after the war with the founder’s grandson,
Satoru Kaihara, establishing a textile mill with 34 automatic looms in 1951, growing to over
100 five years later. At the same time, there was already a growing attention to the dying
process with the development of a patented machine in 1954. As for Hakuhodo it was spun
oZ in 1974 by the 2nd son (and his spouse), Kazuo and Misako Takamoto, from a family that
had been in brush-making for three generations and, at the time, focused on a mix of
brushes for diZerent uses, mainly at the lower, i.e., cheaper end of the market. The idea of
the new business was to focus on higher quality, though without immediate clarity of what
the product(s) should be.

More importantly, both were drawn to non-traditional markets, including outside Japan,
for their products and were prepared to modify these products (and the technologies to
make them) accordingly. Through its contacts with wholesalers and trading companies,
Kaihara identified opportunities to make cloth for Western companies (with limited
success) and to sell Sarongs in the Middle East and Southeast Asia via a company in Aden
(today’s Yemen), but that business was cut short by decolonization. For both, the company
created specific, wider looms, both a world’s first. Hakuhodo started to quickly focus on
cosmetic brushes, initially providing them as parts of cosmetics sets for Japanese
producers, with trading companies as intermediaries, but in 1981 also started its own-
branded products under the Misako Beverley Hills name.

Relatedly, both companies attempt to sell more directly to consumers and understand
their demand, but eventually had to settle for OEM production. Initially, Kaihara
eventually established a relationship with the US company Levi's, which had come to Japan
in 1971 looking for providers of woven cloth for their jeans. From 1973 Kaihara supplied
indigo-dyed yarn to these weaving companies, but gradually integrated the whole value
chain in-house: from dyeing to weaving in 1974, to finishing in 1980, and spinning in 1991.
In 1998, the surging fast-fashion retailer Uniqlo became the main customer for its denim
cloth. The breakthrough for Hakuhodo came in 1995 when they signed a contract to supply
high-end cosmetics brushes to Make-Up Art Cosmetics (M·A·C), which was founded in
Toronto in 1984 and, in 1994, sold a controlling interest to Estee Lauder (which acquired
the remainder in 1998, after one of the founders’ early death.) Hakuhodo still aimed at
selling under its own Misako brand and, in 1996, established a sales organization in Beverly
Hills, but closed it again only two year later, focusing on OEM production instead.

Both use “technology” in the broadest sense to scale the business. As mentioned,
Kaihara gradually established an integrated in-house production system covering spinning,
dyeing, weaving, and finishing. But the skill that started this vertical integration process
was the indigo-dyeing, where following the first machine in 1954, they developed another,
continuous one in 1970. For Hakuhodo, it was also the better understanding of and
eventual control over the whole supply chain and production process. Most competitors
outsourced certain parts, while Hakuhodo kept or brought everything in-house, which was
crucial for their quality. Thus, in 1996, to help organize and managed the production
process for the increased volume, the founding couple’s oldest son joined the company
from Toshiba, where he had worked in supply chain management. And in 2003 the younger
son, who had worked at a local bank, also joined and became responsible for financial and
business management.

Both largely refuse to compete on price and mainly focus on quality rather than try and
match the low costs of the growing number of Chinese producers. Like with its ultimately
unsuccessful sales organization in the US, Hakuhodo also learnt from its mistakes in terms
of production. Thus, it did establish a factory in Shenzhen, China in 1995 but closed it after
four years and instead built a second production site in Japan. Kaihara did establish a
production site in Thailand in 2014, largely to tie into Uniqlo’s global supply chain system.
But the factory there is more modern than the one in Japan and is subject to strict quality
controls. Moreover, it does not include the spinning and dyeing of the yarn which continues
to come from Japan.

Both retain some a connection with their craft origins, in particular with their strong
focus on quality. They do so at least partially through a strong corporate culture and a
specific shared understanding of their product. For Hakuhodo, this manifests itself in the
notion of “the cosmetic brush as a tool” and the idea that with its focus on three
dimensions (of the face), it is close to the original design of the calligraphy brushes (as
compared to the cheaper paint and writing brushes). Moreover, Hakuhodo never stopped
producing high quality calligraphy brushes even if they make up less than 5% of its
revenues. And they pride themselves on preserving that tradition and have been recognized
as such through various prizes and awards. Kaihara uses the expression “ippon no ito” to
denote their commitment to quality. This goes back to their origins, where their somewhat
peripheral location (as compared to other kasuri producers) forced them to compensate
for the resulting cost disadvantage by working harder and providing better quality.

Last not least, the question needs to be asked what role was played by the continued
family ownership and management in both companies. In the case of Kaihara, at the
major junctions, there were often disagreements among family members but once the
majority had made a decision (often involving considerable risks), the family tended to
follow through with the chosen strategy together. Hakuhodo, as seen, brought in the next
generation (two sons as well as daughter), who had originally pursued careers elsewhere,
which provided them with useful knowledge to help the company grow. Overall, family
ownership seems to have enabled them to take a long-term view, as the relevant literature
would suggest (e.g., HoZman et al. 2006). It might have also helped preserve some of the
original craft tradition(s), namely in the case of Hakuhodo.
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